While foreclosure-driven price declines and record low mortgage rates are preventing a renewed slump in sales, companies say weaker confidence and limited access to financing are limiting demand. Cheaper borrowing costs are doing little to spur sales. Housing since 1982 has fueled every recovery except the current one.
The median forecast of economists surveyed by Bloomberg News called for a 4.75 million rate. Forecasts in the survey of 74 economists ranged from 4.5 million to 4.99 million.
The median price of a previously owned home dropped 5.1 percent to $168,300 from $177,300 in August 2010.
Existing-home sales, tabulated when a contract closes, rose 19 percent from the same month last year.
The number of previously owned homes on the market declined 3 percent to 3.58 million. At the current sales pace, it would take 8.5 months to sell those houses, down from 9.5 months at the end of the prior month.
Of all purchases, cash transactions accounted for about 29 percent, the same as in July, said Jed Smith, managing director of research at the association.
Distressed sales, comprising foreclosures and short sales, in which the lender agrees to a transaction for less than the balance of the mortgage, accounted for 31 percent of the total in August, up from 29 percent in the prior month.
Investors accounted for 22 percent of purchases in August, up from 18 percent the previous month.
Sales of existing single-family homes increased 8.5 percent to an annual rate of 4.47 million, the highest since January. Purchases of multifamily properties, including condominiums and town houses, rose 1.8 percent to a 560,000 pace.
Purchases climbed in all four regions, led by an 18 percent jump in the West. Demand increased 5.4 percent in the South, 3.8 percent in the Midwest, and 2.7 percent in the Northeast.
The residential real estate industry, which helped trigger the recession, is struggling more than two years into the economic recovery that began in June 2009. Housing starts in August dropped 5 percent to a 571,000 annual rate, the slowest in three months, Commerce Department figures show.
Most builders remain pessimistic. The National Association of Home Builders/Wells Fargo sentiment index dropped to 14 in September, a three-month low, from 15 in August, the Washington-based group reported this week.
Readings of less than 50 mean more respondents said conditions were poor.
